Apple Wants To Pay Networks For Skipped Ads In Upcoming TV Service [Report]

Until Apple can get the cable companies to play ball, its TV set will remain a rumor.

Apple has been trying to get a TV streaming service off the ground for quite some time. Instead of requiring your expensive cable subscription, Apple’s approach would likely be internet-only and rely on individual deals with the networks.

In order to entice the networks, Apple has proposed an interesting business model for advertising. According to a new report, Apple wants to compensate networks by paying them for ads that viewers have skipped.

In recent discussions, Apple told media executives it wants to offer a “premium” version of the service that would allow users to skip ads and would compensate television networks for the lost revenue, according to people briefed on the conversations.

These kinds of talks indicate that Apple is aiming for a mix of live and on-demand TV. When a viewer records a show on a DVR and then skips through all the commercials, advertisers lose eyeballs. Apple’s system would somehow track skips and still pay networks.

Lessin’s report also notes that “Apple wants to strike deals with cable companies like Time Warner Cable to allow cable subscribers to watch television using an Apple device as a set-top box and with a software interface designed by Apple.” It’s already been rumored that a deal with Time Warner is about to close.

Little is known about the details of Apple’s TV service, but the company clearly wants to build upon what the current Apple TV set-top box can do. The biggest hurdle to overcome will be convincing cable companies and content creators that Apple’s method of delivery will be more profitable than what is already in place.

I think the tv industry is ripe for massive change. The tv industry is basically the same as it’s been forever. With the internet changing the delivery methods it’s just a matter of getting the tv execs to pull their heads out of their behinds. I think their resistance to change is what is holding tv back, same with record companies. They refuse to move forward and come up with their own methods of distribution, so companies like Apple and Pandora have to come up with the ideas.